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tv   Squawk on the Street  CNBC  March 8, 2013 9:00am-12:00pm EST

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welcome back, everybody. just a reminder for you. sunday at 2:00 a.m., that marks the start of daylight savings time. spring forward, lose an hour of sleep. so you're going to be even more tired when you come in on monday morning. happy friday. let's get back to our guest host. that just depresses me. leave us with -- you know what, it's been such a good news day and i don't want to screw it up, but is there anything you're worried about at all? ten seconds here. >> i think one bad thing about getting bad news, if we keep getting it, people will start to obsess about the end of qe. i think it's too early for that. i think it's goldilocks right
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now. the analysts are still too negative. stocks go higher. >> thank you very much for joining us today, alec. have a wonderful weekend. join us on monday. "squawk on the street" starts right now. 236,000, that is the jobs number for february. the jobless rate, 7.7%. that's the lowest since december of 2008. good morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer and david faber. melissa is off. futures looking at a sharply higher open. we'll see if we get past s&p's record closing high of 1565. take a quick look at europe as well. and overnight in asia. our road map begins with the best jobless rate in four years. the best jump in construction, hiring in six years. what's behind the number? can it last and is the fed now behind the curve?
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>> look at me. all right. mcdonald's same-store sales, decent february, despite the worries about chicken? china. big day for the banks. everybody but ally passes the stress test. which ones are most likely to deploy capital to shareholders? pandora is up 26% on better than expected fourth-quarter earnings. impressive mobile growth. joe kennedy is leaving. he's going to run the world's biggest personalized radio service. we we gin with a much stronger than expected job numbers. well above forecasts of 160,000. the unemployment rate fell by .2% to 7.7%, the lowest since december of '08. the dow is poised to set another all-time high. that would be the fourth day in a row. there's a saying that's working its way across the market, bulls
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win, and bears won. this is annoying. >> i think that one of the things that must be very frustrating for the people in washington is to recognize, they get off the front page. we start hiring. this is post-fiscal cliff. i wonder whether it makes the president and congress say, look what we can do we stop fighting, because this is a truly impressive number. joe kernen said, oh, now we know why we've been up for so many days. i'm not going to disagree with that. >> 48,000 construction. >> wow. >> manufacturing, 14,000. retail 23,000. this is all happening in the context of a sequestration, right, of a payroll tax, gasoline inflation. >> and we got revised up the month previous. >> i'm not going to look through it. i know immediately, you start hearing, okay, the fed is too easy. but we're still a way from 6.5%. kind of interesting numbers --
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>> we're only 1.2%, we're not that far. we're not that far. >> we were at 5.5% in september of 2007. >> yes, we were. >> why can't we get back to that. >> i know. but you just heard the last guest on "squawk" talking about it. if we get another number similar for march, you are going to hear more and more talk about, all right, qe, what are we going to do, how are they going to get out of it. the unemployment rate drops, let's say by just one percentage point -- .1 of 1 percentage point, i should say. >> if the fed has to stop the high-quality -- maybe our country has been off life support. life support is bad. >> people living on a fixed income may actually be able to get an income from the fixed. >> is that bad? >> no. >> thank you. >> this market has been built to a certain extent on incredibly low rates and borrowing.
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>> many people refinance. we see companies -- there's a lot of people who have accomplished what they should. the only people i think are going to be crushed is the ones that thought it was safe to own those funds that they bought. >> a lot of discussion about the number of upside macrosurprises since the last jobs number. chicago pmi, ism, confidence, cap x. now this. i mean, do you believe that the economy is shifting into another gear here? >> i think that housing is incredibly important, and the bottom in housing is underestimated by everybody. because there isn't anything like feeling that that asset that you bought has stopped going down. because suddenly you feel like you can move. suddenly you realize there's a two-way market in the housing. i think we hear michael jackson came on and how strong automobiles are strong.
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automobiles, spending at the store, and housing are the u.s. economy. that's what we do. it's good. >> it is good. i continue to come back to washington. if you were to actually get real progress, the dinner that they had the other night resulted in some sort of broad agreement. could you imagine? and then you start actually seeing legislation, whether it be immigration, or energy policy, i mean -- >> how many companies -- >> what would that add to gdp? >> how many companies come out every day and say, we're thinking about using the ge locomotive, the chemical countries that come out, the pcb companies -- piping, if we could get medicare part b up a little and change some of the configurations and in 2030, we change social security, i don't know, i think china would begin to think, you know what, the united states -- i use that as an example because everybody feels china is beating us everywhere -- we beat everybody
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we need to do the grand bargain. >> they hate each other down there. >> the s&p record, that's going to be maybe the story of the morning at least. >> yes. >> 1565 is the closing high. there's interday, 1576. and as far as the dow goes, jim, 14,414, which is 85 points away, would put us in double-digit gains for the year. is that too much too soon? >> no. because i think the market has great faith in bernanke, more than the pundits. i think the market says, you know what, they can figure out what to do in washington in the interim. we've got a tremendous pent-up demand. why do people -- we've had people on air who say, we may build as many as 1 million houses. we built 1.6 million houses for years. how many people have to get hired. you talk about the immigration
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policy. if you get a normalized immigration policy, when we shut down immigration, that was bad for housing. you get people back in a credentialed way, they buy houses, we can go to 1.6 million houses. we can do it. we can go to 17 million cars built. these are very important. >> without creating a bubble. >> without creating a bubble. i think you have to have a little more faith in bernanke. >> why should you have more faith in bernanke? >> because he saved the world. >> he did? i still remember -- i know it was a long time ago -- but you were pretty upset with him. >> hey, listen, the guy -- >> he's most improved. >> he made fun of me in the fed minutes, and that was a bummer. but then he got religion. geithner said, you're right. but bernanke got religion. people can change. you think pem can't change. you've always said that about me. >> that's true,ive do. yeah.
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and cutting out coffee. >> i think bernanke changed. i want to have faith in bernanke. i refuse to think he's a buffoon and mouth talking. i think he'll get us out a jam, and i like being the minority in that. >> now that you heard the jobs report, we asked you to tweet us the predictions for the february nonfarm payrolls. our staff combing through those many entries right now. they are searching for that winner. who is going to receive a post 9 first anniversary mug. that was autographed by the "squawk on the street" gang. yes, all of us. we'll announce the winner of the contest later in the show. >> good luck, buddy. i was 5,000 off. >> really? >> my guess was 241. but i think i'm ineligible. >> i was 199. >> i wanted it badly, though. >> go back for a second. this energy boom is really big. maybe because like we live in new york, we're not allowed to frac here.
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people are fracking all over the place. >> there's a lot of fracking going on. >> when you speak to companies, all they ever do is say, energy is a gigantic part of making aluminum, steel, plastic. >> i completely agree with you. and you have also been on this issue for years now. >> yes, i have. and i was wrong for a very long time. >> but people perhaps not realizing just how -- what a game changer this can be. you've said it many, many times. >> we are going to be -- these numbers are quite wrong and very conservative about how much oil we'll produce in the next two years. go back to north dakota, north dakota two years ago, the state predicted they would do this. the figures, the national figures show they do far less. if we had pipes from north dakota, which by the way, $60,000 per person who, that's the average salary for somebody who builds pipes, we would be
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shocked, the energy self-sufficient in the continent in two years. two years. >> no doubt. >> a way of life throughout the midwest. >> it has. and it is a technology story. we sometimes forget, we talk technology. everything's silicon valley and apple and everything else. this is technology. >> absolutely. >> i was on a rig, continental resources, and i said, what are you doing? he said, we're drilling down 5,000 feet and then we're going to make a right and drill 5,000 feet. 5,000 feet? it was more like a blizzard with -- you know, if they had maxed m&ms and oreo cookies in the fracking fluid -- >> mcdonald's historic higher today. >> how good is that. >> global same-store sales is
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down. extra day due to leap year last year. take that out the comps are actually up in february. china, as david said, decent despite all the chicken stuff. we had weather here in the states. chatter that maybe the menu, maybe this is a comeback. >> don, talk to me about it, he's an innovator, the ceo. >> it's about finding what people want to eat and you can make at 14,000 places very simply, very quickly. >> have you seen the rally in the stock? so many guys downgraded it. that thing is percolating. that had been a laggard in the dow this year. it has become a leader. you talk about technology. mcdonald's is a major research lab for food. >> indeed. absolutely. it is an engineering company, almost more than it is a food company. at 98, i know you liked it at 85. i know you liked it at 90. >> i think management matters. and i have been so impressed with don thompson. i have to tell you, i think he
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understands how to have good tasting food and lower calories. i think that is often the secret. he has really figured out kind of a natural bent and he's leaving the other guys behind. i think that's really important. >> the issue of whether or not they can continue to take share is a big talker today. >> yes. >> for a while there, you will admit it was a little less certain. >> i think the transition was hard. a new guy comes in. turns out the new guy is every bit of good. it's like the '27 yankees, there's always someone who steps up and is good as the next guys. >> skinner like rivera. >> yeah. >> like the 2013 yankees. >> i think there were a lot of guys who -- whatever. i don't want to make dispersions. i want to say i think it's great that thompson has succeeded. when you come in at mcdonald's, the shoes are always so big to fill. i've got to tell you, i think this company is on a major roll.
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>> we've got your bases covered on today's jobs numbers. 236,000, that's a big number. we'll get reaction from a chief economist. are the numbers a sign of things to come. we'll talk pandora. 26% in the premarket on the up side. even though the ceo is stepping down. what joe kennedy said to julia boorstin about leaving the company. david and jim will talk about the bank's stress test last night. winners and losers today. one more look at futures. look at that. "squawk on the street" is back in just a moment. (announcer) scottrade knows our clients trade and invest their own way. with scottrade's smart text, i can quickly understand my charts, and spend more time trading. their quick trade bar lets my account follow me online so i can react in real-time. plus, my local scottrade office is there to help. because they know i don't trade like everybody.
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a look at futures. looks like 100 point open to the upside, which is going to be another record high for the dow. keep your eye on the s&p today. that's going to be one of the keys. 20 points or so to the closing high on that index. let's talk stress tests a bit. 17 of 18 banks have passed the federal reserve's so-called stress test, meaning the banks are sufficiently capitalized under a bad scenario. firms came in near the bottom of key capital ratios.
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it's all about capital. we know that. and in fact, our banking system may never be better capitalized than it currently is. a lot of investors have been focus the on these tests because they're giving you a scorecard, at least, of what you might be able to expect in terms of capital return. in terms of how overcapitalized these banks are, and therefore, what they can expect in terms of repurchases and other ways to return dividends capital. >> they just work. they're additive. >> yes. >> for citi, 1.2 billion that can come in. citi, remember, is down 9% from -- >> and citi is the star in a sense, perhaps because it was coming from not as good a place as some of the other places were from the other stress test. >> i think that's important. a recognized stock. we talked earlier the market keeps going higher. go back to the stocks and citi's done nothing. done nothing. it seems -- >> back to the split adjusted. >> that's right. >> you've been a fan of key.
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>> wow. a lot of people just -- they kept looking at this net interest margin, it's not so hot. i think you have to open your horizons and recognize if we get lending again, that's what provides the growth. you can cut your way, hope to be able to arbitrage your holdings. what really matters is lending. and you have enough capital, you feel emboldened to lend. you see the employment numbers for people who do want loans. jpmorgan has hired a lot of people to lend, we know that. but the rest of the country is cutting back. >> let's take a listen to what you said about this subject last night on "mad money." >> after we get the stress test results on thursday of next week, i think investors are going to jump all over sun trust as the company redeems itself by passing with flying colors, boosting the dividends dramatically. that's why i want you in this regional bank before that happens. sti represents the best buying opportunity in one of my
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favorite sectors for 2013. >> they had failed. remember, two-part stress test, as you know. next week we get more information. sun trust used to be -- when i was at goldman sachs, this is what jpmorgan was. we thought this was the greatest. this is the finest, most pristine lender. they really stumbled. and when they fell, it was breathtaking. i think they can succeed now. you talked about the notion of the bad going to better and how that's actually a stronger investment call than the good staying good. this is one of the worst going to one of the best. i think that's really important. >> something that had fueled the stock's rise in the past is always the idea of consolidation. and i don't see that as a real possibility on the horizon. >> i don't either. because of the concentration in the banks is crazy. >> if you're jpmorgan or any of those, the idea that you're going to be able to go out and buy another bank is not something that you can entertain. >> for those at home, you would
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rather have a sun trust cnp than a goldman, morgan, jpmorgan. >> i think goldman's book is clean. i think it's going to surprise people. i'm such a bull in m & a this year. i think you're getting converted to that. when you talk about a vodafone deal that's on speed dial, i think it's important that these banks were all trapped in this -- i like to talk about the four walls of the canvas. the analysts only think about net interest margin. we had schiller on. the atlanta housing values up 10%. so suddenly it makes sense to go buy a house and not rent. you might want to move out of your mother-in-law's place. you might want to do these things. >> you might. you might. >> it does happen. >> goldman, lessen, about 10%. >> that's called return on equity. >> yes. it is. that's an important barometer of progress. >> i believe other than the fact that lloyd's got the beard, which -- >> he got rid of it.
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>> did he? he didn't have it at the super bowl. but you get m & a, you get agency business. i mean, they put up their own capital. that's a good business, too. i like this hoop so much. >> as you can see, cramer is on the job ready to help you make some money. you'll hear him next in the "mad dash." the jobs number up 236,000, gives us a boost. the jobless rate 7.7%, the lowest since december of 2008. but we can still help you see your big picture. with the fidelity guided portfolio summary, you choose which accounts to track and use fidelity's analytics to spot trends, gain insights, and figure out what you want to do next. all in one place. i'm meredith stoddard and i helped create the fidelity guided portfolio summary. it's one more innovative reason serious investors are choosing fidelity.
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well above expectations. looking at a triple-digit opening if things hold for the next six minutes or so. let's get cramer's "mad dash" ahead of the open. another star. >> a new ceo. looks like the turn is happening faster. now you say, another win for carl icahn. a lot of people said, has he lost his edge here? this company's in trouble. not only is it not in trouble, it looks like the rotten past -- because they had engine problems -- behind them. a lot of shorts in the name. goes much higher. it does not stop here. >> somebody told me this week that class 8s for february, normally down in the past few years. not this year. >> looking north of 22,000. there's a sense, by the way, that that group, which had been very bad, because of china, is coming back. and a lot of the united states, you remember you use trucks for fracking, i think the truck market is much bigger than people realize for american
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manufacturing purposes. and navistar is back. and cummins is the king. >> candy favorite. >> you know, there's like a group of stocks that people like zag, which is the cover to your -- i don't want to mention that stock. because, wow, world of hurt. but it's a woh. the big cap stock. the analysts still loved it. piper downgraded it. raymond james downgraded it. what were they recommending it for? this is ear buds for heaven's sakes. >> a lot of costs due to international expansion, lost a major customer in the quarter. >> inventories up. i mean, this company is textbook -- this is like, let's break out the jcpenney textbook and follow it to the letter. i know david uses the jcpenney textbook. this is like the son of jcpenney. is that unbelievable? >> not in a good way. >> not in a good way. inventories are high.
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they need ron johnson to step in there and clean up the mess, r.j. the dow going for four straight records in a row. we'll get help from that jobs number, of course, better than expected. we'll run you through the numbers when we come right back. hello? the words are going this way-there's no way. oh, the lights came on. isn't technology supposed to make life easier? at chase we're pioneering innovations that make banking simple. deposit a check with a photo. pay someone with an email. and bank seamlessly with our award-winning mobile app. take a step forward... and chase what matters.
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you are watching cnbc "squawk on the street" live from the financial capital of the world. opening bell set to ring in just about a minute. we've had three record highs on the dow this week. 85 points puts us up 10% for the year. it's come a long way in a very short period of time, jim. but the data has backed it up. >> yes. i think that's really what's going on, whether it be the pmi, federal reserve regional banks, whether it be the sense from the housing starts, this is real, okay? it's not based on chinese imports. it's real. >> right. which, by the way, we're down overnight. let's get the opening bell here. one of our favorites, rebecca jarvis helping ring the bell as
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we look at the top of your screen. at the big board, international women's day. the nyse hosting a panel discussion called changing the conversation. at the nasdaq, the off-broadway musical, "forever dusty," for dusty springfield. >> i saw that. very nice. how about the fact that she rocked at the academy awards. was that the highlight? >> very nice. >> she's unbelievable. wow. >> we're looking at a gainer to loser ratio today. >> i wonder -- look, at a certain point, someone's got to come in and take hold here. it's taken people by surprise. we're gaining adherence. the adherence tends to be in the j & js.
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this is not speculative stuff that's being bought. it's just household stuff. and i think people are buying these because they say, listen, i can't be in bonds anymore. i want to be in blue chips. i know that's a dangerous term blue chip after what we've been through, but it's a blue chip rally. my daughter calls me, okay, she goes, dad, i've heard of a lot of these companies that are doing well. how many years was it before we were led by mosaic and potash. >> it was for a while. >> colgate, right? >> and then, of course, yesterday we crossed the threshold of the $300 billion dividend threshold. according to berini. if you're looking for yield, not special dividends like we saw in december, but significant dip hikes matter. >> there are two funnels into doors that may not be big enough. there's the fed to get out of the position, and then there's
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the -- how much stock did they really buy back. and if you go in a goldman sachs right now and say to them, i need an offering on 1 million shares of clorox. they might say, listen, that's too dangerous. i don't want to offer a million shares. there's -- some of these stocks, disney, disney feels thin to me, meaning there doesn't seem to be a lot of supply. people used to say, listen, we used to have the five, ten-year base es, and we're going to honeywell in levels we haven't seen before. but the stocks aren't really expensive. now the kol gates are, but the industrials are not. google is not. i know that sounds weird. but it's not a google rally anymore. >> that is now the most-held stock -- >> i see merck going higher. i see more comfortable when the market is being led by companies like mcdonald's.
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that makes me feel good. because that means people aren't speculating. >> mcdonald's seems like a good stock. >> i haven't seen a list of com po nents, but i imagine mcdonald's and citi is close to the top. >> while the rest of the banking group not doing much at all, goldman, morgan stanley, jpmorgan all down, but citi is the best performer among those big banks. i looked at the regionals that scored at the top of the stress test. >> how about retail. how about walmart, which everyone said was not that good. target, which allegedly missed the numbers. again, i shop at target. let's buy tar get. we're in one of those peter lynch moments where they say -- i shop at kroger. wow. kroger, there's a stock. it's at 30. that's my supermarket. >> are you telling people to go with the peter lynch style of
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investing now? >> no, that's what i'm saying that's what people are doing. they go, i should buy some stocks and call their broker and say, i was at mcdonald's, that seemed good. i went to panera -- >> there is a sale on tiffany today, for example. they report in a couple of weeks, they say it's not going to be pretty. >> how did that stock get to 70? that was the mystery. it's how it got up to this level. >> i'm just thinking about the magellan fund. remember when we used to care about the magellan fund? finick went on to extraordinarily successful hedge fund career. >> i regard this as a moment of, people aren't buying, let's use ebay as an example. it's not an ebay rally, okay? it's a clorox rally. clorox's valuation is 19 times earnings. people say, i use clorox, i use bleach, i'll buy it. >> that's a high multiple. not sure i would want to --
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>> but the techs. supported very good mid quarter. i thought emc was supposed to have a weak quarter. people are buying things -- traders are buying tech. the investors are still buying household names. >> i wanted to talk about smithfield foods briefly. sfd, the symbol there. that stock is up this morning. continental grain, one of the largest shareholders, about 9% shareholder, comes out with -- it's going active on them. it's not threatening a proxy fight or anything, but writes a detailed memo to management saying, you've underperformed greatly. you paid yourself a lot of money and it's putting the company into three productions. the food shares are up on that activist play there by
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continental. they're not threatening a board fight at this point, but we're -- >> the "wall street journal" did not credit becky quick for breaking the natural engine story with warren buffett. they're suggesting a spin-off. there was a time i would say spend something. dizzy. my head is spinning, like a whirlpool. it never ends? how is whirlpool? up almost $2. household name. >> household name. get a good employment number. i think that's -- >> the gainers, i mean, h & r block, whirlpool as you mentioned, citi, norfolk southern, it is a cross-section of the -- >> yes. go to sherwin williams, the same-store sales are up. home depot.
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another one. now, lowe's had a disappointing quarter. this is a marvelous moment. is it too hot? all i can say is that if there's a lot of people who missed out and they're coming in. and maybe this is -- maybe they should wait for a pause. but they look at bank of america and citi, they looked at their statement -- you open their statement and it was yielding 5. these are people who are encouraged. they're encouraged. >> yeah. it's sort of reflective, you've got the household net worth from the fed. >> wasn't that great? >> up 20% from the low. we know how bad it was. later on this hour, you'll listen to mark haines' call the s&p bottom almost perfectly, almost four years ago this sunday. >> and he does it with that pixie -- >> we'll hear that sound in a few minutes. pisani is on the floor on a friday. >> good morning, everybody. happy friday. what a jobs report, huh? interesting, the futures only
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moved a little bit on this. this is a string of stronger news. consumer confidence, ism manufacturing, chicago numbers were all generally better than expected. alec had a great comment this morning talking about the goldilocks scenario, strong enough to get the attention of the markets. not strong enough for the fed to actually act, either by lowering their purchases or raising interest rates. the big story this morning that's being passed around was the reuters story about the fed actively considering allowing their bond portfolio to simply mature. of course, mr. greenspan is -- excuse me, mr. bernanke mentioned this before. it got a lot of attention. not dumping bonds would put less pressure on bond yields. that's gotten a lot of attention overall. dollar rallied huge this morning. i mean, shot up at 8:30. the euro dropped dramatically on the nonform payrolls. did you see the global markets? this was before the nonfarm payrolls came out. big week for global stock
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markets. japan revised its q 4 gdp. it's positive now, sitting at the highest level, nikkei, since september of 2008. a big week in europe as well, all the european markets were up. germany sitting at a five-year high right now. as for the stress test, jim, i agree with your point here, that the regionals are big winners this morning. we see sun trust up about 3%. key corp up 1%. all could raise dividends here. i think the big question is, why no dividend for citigroup? why just $1.2 billion buyback? i called around and asked for opinions. a lot of people felt increasing the dividend -- suppose they increase it to 24 cents a year. with a $45 stock, a lot of people i talked to said, that wouldn't make a lot of difference. it would only get an 0.6% dividend yield at this point, that it did make more sense to do a buyback, roughly 1% of total market cap for the company.
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by the way, capital one, right now only pays 20 cents. i've seen estimates they could start paying $1 now. remember something about all these companies, they paid much higher dividends. capital one, they were paying $1.50 a share in 2008. now they're paying 20 cents. even if they go to $1, it's still below where they were. bookings rebounding, backlogging as well. more in the next hour. guys, back to you. >> thank you, bob. people say, jpmorgan, not doing well. it's nine times earnings. i'm not worried about jpmorgan. morgan stanley, not that perfect. remember, if we get lending, these stocks are inexpensive. if we don't get lending, they're expensive. rick santelli is in chicago. go ahead, rick. >> thanks, jim. of course, we have a better than expected data line, with regard to employment. when these things occur, especially in tight chronological order, the markets
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think everything's the way it should be. and you get to really see what's going to mover, should the strength continue. of course, you always have to go back to the fed. especially with interest rates. for the moment they're doing what you would expect. they're moving higher. interday chart of ten-year note race, you can clearly see it pop. if you look at the same chart of ten-year boon rates, it's the same. everything global. if you open this chart of comps up to april, we have 11-month fresh high yields on the ten-yesh, on the 30-year. time for the currency moment. if we look at interday charts, you can see why the dollar index is a moon shot today, as bob pisani pointed out. look at the dollar/yen, the pound versus the yen, the dollar index, dollar index now making fresh seven-month highs going back to early august. this really is an impressive move by the markets.
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keep in mind, to put a throttle on this, if you looked at job average monthly gains from 1992 to 2000 per jim bianco, that was 252,000 to put perspective here. jim, back to you. >> thank you, rick. let's check out the moves with commodities. >> we've been watching the dollar and euro, too, here, the pullback in the euro has sort of taken the bottom out of brent and moving much lower. although we've recovered when it comes to wti nymex. the focus is the economy improving. goldman sachs had lifted its outlook on commodities over the next three months. particularly in copper. they say they despite the fact that last night we got some bad numbers on february demand out of china, they see china demand for copper improving over the next six months. and with copper having come down so far, they think it's attractive, at least on a three-month basis. the next few months near term.
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david, back to you. >> thanks very much, bertha coombs. one name we haven't mentioned thus far this morning, news corporation. yesterday we were talking about time warn e's decision to spin off its magazine and publishing business in the form of a new time inkwell. newscorp beat that company to the punch with the announcement of the split of the two businesses. we've been waiting for the proxy of the split. getting a little more detail on what the two companies will look like. now, a lot of that has dribbled out over time. proxy did come out this morning, as you might imagine, fairly voluminous. what can i tell you that we didn't know well? a lot of it has to do with cash in the balance sheet. we assumed there wasn't going to be much of any debt on the new news corporation. that will include the likes of dow jones. and all the australian newspapers. and by the way, australian broadcasting assets. a bit of a faster grow than a poor publishing company. it will have about $2.6 billion
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in cash. a good deal of cash on its balance sheet. of course, one question, will it then go out and try to do something like buy the l.a. tribune, times, you know, owned by tribune. we'll see. but that murdoch discount certainly has been coming out of newscorp shares. have you seen them lately at over $30 a share? the stock trading at about 15 times 2014 numbers. so it's getting up there in multiples, to jim's point earlier about where we are in terms of multiple. this is not bad. a lot of the group has traded up to that level. once we do get the split, a fox group, of course, which will be the broadcasting assets, much faster grower. and the new newscorp. this is an expectation that both will buy back shares, particularly the fox group at a more rapid rate. news corp. had a huge share repurchase going on. you can tell, because actually on the australian law, they need to file it. they've been down about 300,000
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shares a today. they could get as much as $5 billion, to perhaps as much as three times. that is part of the bold case scenario. when you look at the move this stock has had, trading at 15 times, you know, hard to know that there's going to be that much value. the new newscorp may be worth between $2 to $4. that's a big range. >> what about the sports network to compete against espn. won't that give the fox network a higher valuation? >> it could. >> because it's been so lucrative. >> it could. if they could get 5 bucks a household, yeah. when we talk about that kind of sports program getting those kinds of numbers, you do start to think about the bundle, and whether or not sports programming is going to eventually blow that bundle apart, because it will be so expensive. >> pay a lot of money and don't care. maybe one day you do care. >> ratings make it worth it. >> isn't it incredible. >> especially having to watch
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live. when we come back this morning, "new york times" columnist on this whole macy's versus jcpenney issue. he's written a lot about martha stewart in his book. the judge in the case ordering both retailers into mediation. what are the chances they'll settle? and what would that mean for martha's brand? as we go to break, man, we came within four points on the dow for 10% gains for the year. it came off of that. jim said there would be some profit-taking. there has been a little. back in a minute.
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selling that open a little bit here. just up 32 points on the dow. of course, near some record breaking levels today. we've come a long way since the financial crisis. you may remember a very important comment made on this program four years ago, this sunday. >> however, i'm going to step out on a limb here, i -- >> a big hold on. >> i think we're at the bottom. i really do. >> that was march 10th, four years ago. at the time, the s&p, guys, we were looking at where it closed. closed at 719. opened at 679. i'm guessing obviously it was closer to the open. so he came within eight or nine points of calling the absolute interday bottom of the s&p. >> it was amazing. he used a lot of -- the school -- he used a lot of technicals in the sense that the
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up/down volume was at a high level. the kchretierescendo sale. i know mark always carried himself so lightly. but he did a huge amount of work on trying to call these things. and the best call i'ver seen. >> it's hard to beat. >> there's a picture of mark which hangs on the staircase between our set and our office space. we literally walk by his picture ten times a day. >> yeah. >> and it's a good reminder of what financial journalism should be about. >> yeah. >> what individual investor protection should be about. >> and no free passes to those people who come on air during '98, '99, 2000. cost people a fortune. he didn't show them. he was tough. everybody else was excited. >> what do we think he'd be saying about where we are now? >> i think he'd like the
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leadership. >> really? >> i think he would say, listen, guys, the greedy guys have to come in and take something off here. i think he would like the fact that people -- he cared about leadership, and the leadership's there. we need the banks. i know he always said the financials. are the banks flagging, that matters, too. he loved leadership. we used to joke about it. remember, he used to say, what's the key to this market. i said, it's yahoo!. he would go, ah! but when i said pfizer, he loved that. >> cramer from the church of what's working now, isn't that what it was? >> yes, indeed. so much fun. >> we miss him. we know you do, too. "six in sixty" coming up next. a. a. i try to be smart with my investments. i also try to keep my costs down. what's your plan? ishares. low cost and tax efficient. find out why nine out of ten large professional investors choose ishares for their etfs. ishares by blackrock.
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let's get "six in sixty" with jim. we begin with gec. >> stunned that paulson group, down 26%, this is an average, very good company. this is only down 10% for the year. >> hot topic. >> this is, again, i talk about the stealth bull market to take over. this company is going private. wow. >> alcoa. >> you're starting to -- this is typically not a strong quarter.
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don't get excited. >> kkr. >> doing a lot of important oil and oil service. people don't recognize they've got a lot of good oil assets. >> icahn, busy. herbalife. >> he didn't say whether he would buy in the 40. they need to clarify this. >> bernstein says demand strong. >> boeing has just been a horse. they don't quit. >> what's tonight? >> people are excited about the idea that there might be an engine that runs on natural gas. these are the guys who have the intellectual property for it. they also do the truck engines. i do want to point out the stock reported last night, better on quarter. this is a good day to take profits in the hold market. i think a lot of the short sellers covered it at the opening. they're done. a good day to take a little profit. i would take profit if you've made a lot of money here. >> see you tonight. have a great weekend.
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>> you, too. >> what a week it's been. 6:00 and 11:00 eastern time. simon? >> a big jobs number. you deserve big guests. we've got them in the next hour of the program. goldman sachs's chief economist will break down the numbers in detail. and david faber will have an exclusive interview with john burbank. find out where he is investing after making so much money in the housing crisis. stay with us. this is cnbc on a very big day. [ kitt ] you know what's impressive? a talking car. but i'll tell you what impresses me. a talking train. this ge locomotive can tell you exactly where it is, what it's carrying, while using less fuel.
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welcome back to "squawk on the street." january wholesale inventories up 1.2%. that's about four times what we were expecting. now, if you flip it and look at the sales, month over month, they were down .8 of 1%. something the feds want to pay attention to. building inventories is a gdp booster, not selling them, is it. we'll continue to monitor. we are well above 2% in a ten-year. and should yields close at current levels, we would have fresh 11-month highs on the interest rate complex. we're right now at fresh seven-month highs on the dollar
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index. back to you, carl. >> thanks a lot, rick. let's get market reaction to the number, both that number and, of course, the jobs numbers, 236,000 that came out at 8:30 this morning. the employment rate 7.7%. cramer just said a lot of the shorts covering in the early session, pulled back a bit. now just up 14. in cramer's words, take your profits and go home. we'll see where we close. let's get more on the data and the very, very good jobs number. let's bring in steve liesman. steve, take it away. >> i'm looking at the wholesale number, which rick is exactly right, four times better than expected. and that's good number. it's either going to go -- people will buy it or it will go on the shelves. we count all of it as we count gross domestic product.
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they use words like solid, better than expected for a big upside surprise this morning. but some still warning the strength is not the trend here. let's take a look at the numbers. nonfarm payrolls 236. economists were expecting only 160,000. so almost 100,000, or 76,000 more. unemployment rates, 7.7%. forecast at 7.9%. average annual earnings okay at plus 0.2%. here are the details. construction 48,000. we've been waiting for a pop in that, given that we've had home construction increase. manufacturing do be better. health care, perennial job better. retail was a question mark because we were concerned about the payroll tax taking away from retail. maybe that's a sign that the retailers are doing better than we think. temporary help is a leading edge of unemployment. that's good. government decline, is more at the state and local level. because of the sequester, expected more to come from the federal level in the months ahead. economists are still warning of
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trouble ahead when it comes to the jobs market, to-wit, saying the labor market was in decent shape before the sequester began and impact of the january 1 payroll tax hike. but that does not mean these two factors which equal a tightening of 1.5% of gdp will not reduce payroll growth in the months ahead. that's ian shepherdson from pantheon. the participation rate is down again. that's something the fed will take very, very much into account when it looks at the decline in the unemployment rate. if people are dropping out, it means there's still a lot of slack. and then the last thing i want to talk to you you about, guys, is the fed, 7.7%, our numbers are something like 7% is what we expect for when the fed will stop quantitative easing. but again, they're going to look qualitatively at all this stuff.
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>> can i quickly in the celebration, it will continue, a great figure obviously. can i just kick the tires on it, steve. >> i think i did a lot of tire kicking there, simon, if i'm not mistaken. >> 271,000 for february last year. it turned out maybe there was a problem with the adjustments. certainly we gave it back over the coming months. have they changed the way they calculated it this time around or could it be overinflated because of the ways they attempt to count for the season? >> no doubt there's a lot of seasonality, a lot of strength in the winter that look like it's coming from some problem with the seasonals. the expectation now, simon, is the seasonals have caught up to it, and that it's taking that into account this time. but you don't know. we'll see if we have another swoon because of the seasonality of the numbers. >> okay. all right. certainly it's boosted the stock market. steve, thank you very much. senior economic correspondent there. let's bring in our guest.
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>> it validates our belief that the u.s. private sector is doing very well. the private sector has been driven by cheap energy, improvement in manufacturing, innovation and productivity. there's a really good headwind behind the private sector. job creation particularly in small and mid-sized businesses which is really the hope for job creation going forward. so good numbers for business. and it's indicating really that the market has fundamentally based rather than just based on monetary policy. >> that's what i was going to ask you. obviously we now inevitably through the day, people will say what will the response be there, what will happen to interest rates if the economy is strengthening. how long can this sweet spot be for investors where, yes, it's a fundamental recovery, and the stock market holds? >> it could run through this year and into next year very easily. there are things that could derail it in government policy. but i do think that government
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policy perhaps fortuitously is going in a direction at a moment. the deficit is too high. we saw the job data, with the reduction in the jobs at the state and local level. sequestration may be crude and awkward, but it's actually probably a policy in the right direction at that stage. >> the white house today trying to throw a little cold water on it. the numbers saying, the data is from a pre-sequestration period. don't -- i don't know if they're saying don't expect numbers like this next month or not. i wonder what you think. >> you may get a bigger negative number from government next month. but i don't think that necessarily hurts the stock market, or the private sector, or indeed the productivity of the economy. a little bit of tightening on the government's side is not necessarily bad for the market. even though the headline number will be reduced. next month you've got to look at the private sector number as well as looking at the aggreg e
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aggregate. >> i like to get to the credit side of the picture. ten-year yields going up this morning. jim, what are your thoughts when it comes to duration, when it comes to credit risk, a little bit high yield perhaps scaring people in terms of some things we saw back in '07. but given that, given the fed, qe potentially coming out. >> yeah. i think that the most likely environment for the rest of the year is a firm equity market, and also firm rates. i think rates will carry on rising. and absent the negative tail risk in the economy, you're going to see rates on the ten-year comfortably above 2.5%, 2% and heading to 2.5%. the credit side is okay as long as the economy keeps growing. the spreads can stay quite narrow. i would be in bond portfolios. there are plenty of successful bond funds out there that have done it by going long duration.
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be very wary of those funds. >> you would agree one of the big stories of the year is going to be the reversal of the negative correlation between bond yields and stocks? >> yeah. i mean, i think bond yields and stocks should both go up in this environment. we're at that stage of a recovery. that is actually the natural behavior. >> before we let you go, 10% up side on the market this year? >> about that, i think. >> what part of the market should people place themselves? >> i like the u.s. domestic economy. we haven't talked about international economies in this segment. but i do worry about europe. i actually think commodities are going to be under pressure. >> goldman today suggesting the sell-off is overdone and they might rebound over the next three months. >> they would say that, wouldn't they, they're trying to drum up business. but i think you need to look for the next year or two, the supply/demand picture. and my view in commodities is really driven by excess supply. high prices are brought on more supply. if you add that all up, you
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don't want to be in the international markets to the same extent as the u.s. i kind of like small caps and mid-caps selectively, because they are domestic. i like u.s. manufacturing, including technology. anything that you can get on the back of the tremendous productivity performance in the u.s. economy. >> u.s. commercial real estate. >> thank you very much. >> thank you. >> have a good weekend. news on paypal this morning. jon fortt has details on that. >> ebay has been driving that company's growth. it hopes to fend off scrappy competitors. first they're releasing tools that should make itasier to use paypal within an app on your phone either by tapping on a button or scanning your credit card with a camera. they're testing new apis. david marcus trying to make a developer-friendly website so people can figure out how to
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work with paypal. the painful truth is that pain pal has earned a bad reputation with developers in recent years for being hard to work with. at the top of the release, announcing the changes, they actually say our tools haven't kept up with leading edge innovation the industry expects. that has a lot of competitors like brain tree and stripe to get a foothold in the new apps and services in the space. this is part of what david marcus has been trying to do since he took over at paypal a year ago. make the unit nimbler for the mobile era. paypal has to mend its reputation with startups if its momentum is going to continue because mobile commerce is taking off faster than most everyone expected. this announcement coming out of south by southwest, the eclectic arts festival down in texas. >> we're going to hear a lot more about that next week. i'll tell you that.
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everybody wishes they were there. thanks, jon. take a look at facebook. obviously we've seen some decent market action. a sell-off here. facebook's not had a good morning at all. after the relaunch of news feed yesterday. i don't know if you guys were able to see any of the presentation by mark zuckerberg. a bit of a run into that. closed on the highs yesterday. but giving some back today. along with a bunch of other -- >> the s&p 500s just turned negative in what was a great jobs number. a lot of discussion still to come on that. >> we'll also be examining the big banks, finding out if financials are ready to lead the market higher after what was the latest round of stress tests and today's strong job numbers. could interest rates go up sooner than expected. one of the top hedge fund managers, find out where john burbank thinks things are headed next. ♪
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pandora rallying, tremendously strongly at the open. joseph kennedy stepping down after the company reported those
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upbeat results last night. cnbc's julia boorstin joins us with more of her exclusive interview with mr. kennedy. good morning. >> good morning, simon. joe kennedy leaving the company on a high note. better than expected results and projections for the year sending the stock flying higher after hours and holding on to those gains today. kennedy telling me that the company is well positioned to profit from growing mobile use. >> my vision was to create an enduring great company. part of that is you build a great foundation, a great fabric, it endures transitions. it's hard to tell people, i announced it to the company today, but i think everyone understands this is all part of a path to an enduring great company. >> now, kennedy wouldn't give me any details about why he told the board tuesday night that he's leaving pandora, after nine years. >> this is the right time for me, and i believe because it's the right time for me to go off and recharge my batteries, that that's right for the company as
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well. >> jpmorgan's doug anmoth overweight on pandora said he's leaving the company, quote, well positioned with market share as well as new integration with radio add at buying systems. there's been some media speculation that karmazon could fill pandora's hole. kennedy said he would be surprised if his replacement did not have experience at a consumer oriented company. we'll have more on who kennedy thinks should run the company in the next hour of "squawk on the street." david, over to you. >> thanks very much, julia boorstin. back to the financials, 17 out of 18 banks passing the fed's stress test. we got far better than expected jobs numbers, of course. so how does all this impact the financials? let's bring in anthony, the bank analyst and managing director of
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raymond james. anthony, first give me your take on the comprehensive capital analysis review, to use the proper context that we got yesterday for the big banks. >> yeah, these results were obviously a positive for the industry. if there was a positive surprise, i think it was citigroup. their capital ratio came in higher than expected. i don't think 2013 is going to be the big year for return of excess capital. i think that's in 2014, 2015. but clearly, the industry has made tremendous progress in building balance sheet strength over the last couple of years. >> i'm looking at some of the stocks. i mean, notable goldman sachs and morgan stanley down 2%. any particular reason in your mind why they would be reacting somewhat negatively? >> the big brokers, so to speak, jpmorgan included, had perhaps lower than expected stress capital ratios, primarily due to the fed's positioning on what
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trading losses might be in a worse case scenario. keep in mind we have the whale from jpmorgan in regulator's minds at this point in time. and there could have been some overly conservative adjustments made there. >> so when goldman makes the front page of the financial "times" for its weakness, that is in general terms for investors a concern because it's the ultimate stressed environment in which they don't perform so badly? >> exactly. another way to look at it, they passed with flying colors, but there may be some reduction in the amount of return investors were expecting this year. we'll have to wait and see next week. >> anthony, if it's not a '13 story, how much confident are you that it's a '14 story or '15 stor sni. >> citi is a top pick right now. when you look at their number, their return of capital was telegraphically less than expected.
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their capital ratio was 8.3%, fully stressed. so for citi, it's just a question of when, not if. for the rest of the industry, we have to go company by company, but i think the recurrence will be there. i think the fed's posturing at this point in the recovery is still ultra conservative. >> anything we can expect to get next week, the 14th, when we get the final results and the non-objection to the capital actions? or do we know all the news that will move these stocks? >> i think with today's release, that there's going to be -- you know, the bloom is off the rose, so to speak, a bit. and i think we may have a slightly higher, or slightly lower return of capital. but the key point here, especially for the guys getting their first-time approval, is that it's a vote of confidence for the regulators. so we still look for the banks that are, you know, more in recovery mode, the sun trusts, the regions, the bank of
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americas, the citis, these are the banks that had the most benefit from this round of testing. >> all right. anthony, thanks for joining us. appreciate it. anthony polini, raymond james. john hatzius, talking about the jobs numbers later on. back in a minute. i know what you're thinking... transit fares! as in the 37 billion transit fares we help collect each year. no? oh, right. you're thinking of the 1.6 million daily customer care interactions xerox handles. or the 900 million health insurance claims we process. so, it's no surprise to you that companies depend on today's xerox for services that simplify how work gets done. which is...pretty much what we've always stood for. with xerox, you're ready for real business.
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welcome back to "squawk on the street." i'm josh lipton. the hedge fund maker getting drilled this morning, saying it expects a loss in the current quarter, higher expenses. the loss of a major customer. skullcandy said they're losing share to dr. drake's beats and seem to have reached full distribution in the u.s. the street reacting. piper jaffray and and merrill lynch responding. down on strong volume. carl, back to you. >> thanks a lot, josh.
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on the heels of today's positive job numbers, online work is boosting job opportunities for professionals who can find a job without ever setting foot in an office. in 2012, 35 million hours were worked through the largest online marketplace, o desk. giving them the chance to hire an employee who is really located anywhere in the world. gary schwartz is the ceo and joins us this morning. gary, good morning. >> good morning, carl. >> people say this is going to be, what, a $5 billion business in a few years, right? >> yes. staffing industry analysts say $5 billion in five years. >> what kind of work does this technology lend itself to? >> we're seeing all kinds of work that can be done in front of a computer, while most of the work is technical in nature, we're getting pulled aggressively into marketing, data, even managerial jobs. four categories accounted for 90% of the work on our platform in 2007. that's more like 35 categories today. so massive expansion.
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>> i'm guessing, obviously in any kind of scenario of job growth, it's going to be fed by smaller businesses. i'm guessing this is exactly what's going on, small businesses, you need a web designer but maybe can't find one that they can like or afford in the neighborhood they're in? >> that's exactly right. we have 550,000 clients. it's a lot of small businesses that can't find talent or can't compete for talent in their local geography. >> you started up in '06, funded by benchmark capital, global span and others. how quickly are you guys growing, and walk us through some of the montization on the business model. >> we've seen an eight-fold increase in hours worked since 2009. and the way the business model works is, we take a 10% cut of every hour worked. so companies post their requirements, manage and pay the workers online and we get 10% of
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every hour billed. >> would this have been possible without the cloud? i'm trying to think what technology -- what progress in technology has led to the tipping point that allows you to grow so fast? >> you know, we do think that technology plays a big role, obviously. it's not only the bandwidth available today, but the tools and technology available on the web. other factors in the growth include the economy. the fact that companies are trying to get more work done, and workers want freedom and flexibility. and globalization as well. three mega trends fueling the growth of the online work market. >> what is the international outlook like? for a long time, anything that you could digitize, any function, you could send to india, and how is this story over the last 20 years. do you see this as an antidote of the offshoring, or do you think it is something that will accelerate it? >> we think it will accelerate it. the reason why is the companies can bring the work to the worker instead of the worker to the work.
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some interesting statistics. in 2007, you know, 90% of the work on odesk originated in the u.s. today it's less than 60%. it's really a global platform, where companies from all over the world want access to the best talent regardless of where it lives. 30% of the work done by americans today originates offshore. so it originates outside of the u.s. >> so do you see yourself as a major disrupter to the temporary employment industry? because i can imagine, if you can match people in this way, if the technology can be taken up by other people, that's hugely disruptive, isn't it? >> we do. we think this is a very disruptive business. it's not dissimilar from ecommerce. ecommerce is about getting the right good and delivering that good and paying for that good. online work is about the same thing, all via the internet. we think it's quite disruptive to traditional ways of getting work done.
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but the market is huge. as evidenced by the report today. i think we're just getting started. >> before we let you go, marissa meyer sparked a huge debate about yahoo!. do you think that could grow? >> i think marisa mayer is wrong. we're seeing the most innovative and forward-thinking companies move in the other direction. the war for talent is full on. i think flexible work policies are table staged for businesses that want to compete in this environment. >> gary, thanks for your time. good day to have you on. >> thanks, carl, thanks for having me. after the break, a deeper dive into today's jobs numbers with jan hatzius. if you think there's a bubble in stocks, wait until you hear about the price people are paying for new ferraris. get your money in gear. back in two. the patient, presented with a hairline fracture to the mandible and contusions to the metacarpus. what do you see? um, i see a duck.
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lots of moves in the metals and energy markets. on the back of the jobs market. let's check in with bertha coombs at the nymex. >> goldman sachs saying at least for the next three months, today we're sort of seeing a mixed reaction across the energy patch at least, we've got nymex crude
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almost flat on the day. it's come well off of the lows. we've got gasoline looking like a short covering rally. since reacting to the strong jobs numbers in the face of a strong dollar. and then when you take a look at what's happened this week, brent crude, which has been so much stronger earlier in the week, now looking to end the week on a down note, after we had the pipeline reopening in the north sea. and on top of that, the euro, which was so strong yesterday, making a huge pullback today after the jobs number. nat gas, well, the fact that it is snowing pretty heavily here in the northeast, just tells us that this has been a strong winter. we had a strong drawdown yesterday. and nat gas poised to be up 9% for the year. right up there with the move in the dow jones industrial average. as far as metals, we've seen a little bit of a move up. gold has been higher about this
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time of morning for much of the week, to fade into the close. on track for the fifth week of decline. we've seen big withdrawals from the gold etfs, but the other precious metals have seen influx. >> thanks, bertha. 7.7%, that is the best jobless rate in about four years. the nonfarm payroll number coming in far above estimates. jan hatzius joins us this morning from new york. good morning, jan. >> good morning. how are you? >> good. pretty good number. a little better than you were expecting. although labor force participation might have had something to do with that rate. what's going on there? >> i think on the household survey, it's a bit more mixed than the headline would suggest, because of the drop in labor force participation, which was surprising, because it had looked over the prior six months labor force participation might be stabilizing. it's a pretty strong household survey and clearly strong establishment survey with the
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nonfarm payroll number, clearly printing. printing strong in the underlying details in terms of the composition of jobs, also looking quite encouraging, especially on construction. >> yeah, a lot of discussion today about what's called the big five. we've got payrolls, the rate, earnings, the work week, all of those things moderate to decent upside surprises. does this mark a new chapter for the labor market or not? >> i mean, it certainly holds out that hope that we are shifting to a stronger pace of payroll gains. it's a little puzzling, i think, if you compare what's going on in the job numbers, where, you know, generally the news has been strong, as you said. and you look at other measures of activity, you know, the gdp tracking certainly fourth quarter pretty weak. first quarter is going to be better, but it's not stellar. some of the other indicators not being quite so strong. so, you know, either that means very weak productivity growth or it means that one of the two sides of the coin is sending the
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wrong signal. maybe what we're going to be seeing is that the labor market sends a more accurate signal than some of the other indicators. but i think there are open questions here. >> yeah. obviously sequestration will have ostensibly some effect on government hiring. i just wonder whether or not can we sustain 200-plus in march and april or not? >> it's not all forecast. we would expect slower job growth. but that's partly also because we think that, you know, the job market numbers and the real activity numbers should converge to a greater grieve. so it wouldn't be our forecast. but it does hold out the hope that things are getting better. for sure. >> we should clarify that the payrolls gain is in fact 236,000 despite the graphic that we just put on air. jan, importantly, that is below 250, which is the rate at which we probably need to add jobs generally speaking, to bring down unemployment. does that, therefore, mean since
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it's below 250, that we don't need to worry for the moment about any more conversations on shifting the fed towards being less accommodative? >> i don't think so. if we're adding jobs at the current pace, then we will be bringing down the unemployment rate. of course, we would be bringing it down more quickly if the payroll number and unemployment trend was higher. but at 236, that is a -- you know, that's a pretty sizeable gain and it should bring down the unemployment rate over time. now, i think -- >> do you think it could shift the fed at this level? >> if it's maintained here, i think so. the question is, how many months do you have to see that you're convinced that is the underlying trend of job growth. if you had a very long period, at this kind of pace, of course they would make some changes. and they would decide that a substantial labor market improvement was taking place. so that's really the question. not so much, is this number good
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enough. it's a very good number on the establishment survey, but really how sustainable is it and how are we going to be looking at this three or six months down the road. >> so is that why the yellens and the bernankes of the world haven't quite moved off that perch? >> absolutely. absolutely. i think what they would want to see is sustained strength. something that -- you know, we've had accelerations in payroll growth before in this recovery, and they've been proven to be short-lived in a couple of cases. so they want to see sustained growth in payrolls. they also want to see, you know, broader signs of improvement, household employment growing perhaps a little more strongly than it has. i think they want to see an increase in the hiring rate. janet yellen went through some of the indicators to look at in her speech on monday. so i think it's the broad picture that matters. >> yeah. finally, jan, just curious, of
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all the data points we've gotten in the past couple of weeks, cap x, new orders on the pmi, is there one where you said, wow, that is truly, truly impressive? >> i'll be conventional here and say the payroll gain is the most important of all of those. it's the highest value economic indicator. and it's clearly a strong reading. but again, the question is, how sustainable is it going to be. we'll have to see about that. >> always good seeing you, jan. wish you were down here. but thanks for coming to the camera. >> thank you. >> jan hatzius at goldman. hollywood saved us. hooray for hollywood. now that you've heard the jobs report, did you nail the number? this week we asked you to tweet us the predictions with the nonfarm payrolls. our staff is rampantly combing
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through all the entries in search of the winner. rampantly? i'm not sure that's the right word there. i didn't write that. who will receive -- this is what you get, a post 9 anniversary mug. the whole gang. we're going to announce the winner of our contest later in the show. soon. there it is. a look. >> jim's the only one who writes boo-yah on it. >> i've got nothing. >> i just signed my name, that's it. anyway, it's beautiful. congratulations in advance for whoever won. after the break, one hedge fund giant raked in big bucks, shorting subprime. the last time the dow was hitting new highs. where's he putting his money to work. two words, fish mcbites. mcdonald's same-store sales coming in lower than expected, after bringing in some new customers. acceler-rental.
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our next guest, one of those that made a lot of money shorting subprime debt. is there a dark horse trade out there? and what about credit versus equity? john burbank, manages about $3.7 billion. nice to have you on the east coast. >> thank you. snowstorm. >> yeah. we always like to do that for our visitors from the san francisco area, the bay area. john, you know credit well. and obviously you're also a big player in the equity markets. i've curious, let's start off with a look at credit. yields moving up a little bit today. it's been a heck of a bull market for a long time. you made a lot of your money there. do you still prefer credit to the equity side or not? >> no, i definitely prefer equity here. credit has been taken to almost
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a nirvana level. allocators correctly were risk averse here, cautious. and all that money that went into credit produced spreads that are now extremely tight. and not appropriate for the actual economic environment. >> you don't think so? >> no. >> you say nirvana level. the spreads haven't come in -- they aren't historically the lowest they've ever been. they're close, but not -- >> relative to equity they are. junk bond yields for the first time ever is trading tighter than the s&p earnings deals. so the junk bond companies basically have no revenue growth, and obviously are susceptible to a bad economy. >> yeah. a lot of guys buying that credit, expecting things are going to be okay. credit yash yos aren't that bad. but you don't like high yields, i guess. >> there's limited upside. there's no growth in any credit instrument. you only have down side when spreads get really, really tight. so i'm not predicting with all
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this constant liquidity that it's going to go down. i'm just saying the risk/reward is net equity. very few allocators wanted to own equity. but after the new year, and after i think the recognition of central bank easing coming in japan, probably in europe, you know, switzerland and uk have already done incredible things. i think the recognition is the risk/reward of credit is turning into more risk. any kind of inflation in the distance is terrible for credit. and a boost to a lot of equities relatively. also, in terms of equities, i'm not a believer that all equities are going to do well. the economic environment is not that good. >> you know today's jobs report? >> no, i don't really think so. i think these are generally lower level jobs. productivity is actually has been declining. and to be honest, another percent and if wages -- if there's any wage pricing power
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of the employed, margins are going to come down for companies, which is not good for a lot of equities. >> you've been negative on the economy perhaps more so than others. i remember our last conversation last year, you were looking for a recession. it didn't happen. >> and supported by ecri's argument that we hit a recession last july. now, the thing is, people inflate the price of assets with economic growth. if the stock market's rising, they presume the economy is doing quite well. remember, we're using government-sponsored numbers for the cpi, and for what real growth is. i actually believe that we have a recession. and recessionary conditions in a lot of the world. >> we just added 236 jobs in february. >> yeah, but the -- who we count as job seekers is highly controversial. and the level of overall unemployment is actually quite high. the low-level jobs are actually getting added in the emerging markets around the world, other than service jobs here. what i like are the high value
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added companies, the multinational leading companies. i think their prospects are quite good. they don't have a lot to do, though, with economic growth here. all equities are not equal. i believe in high value added companies, market leaders, world leaders. the rest of the world is who's getting richer. incomes here are not increasing. they've been decreasing for quite some time. >> but in terms of earnings and cash flow yields right now, when you look at credit versus equity, you come down on equity? >> yeah, but i come down on equity if there's a great corporate governance, alignment with shareholders, using the free cash flows correctly. you know, since i started in 2000, i've seen terrible corporate governance for the first eight years. but since the financial crisis, there's been a tremendous change, a sobriety in board rooms and managements.
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no longer do we hear about ceos gunning, you know, stocks to make their options look bigger. we're getting capital allocations that are very, very good. it's not happening around the world. governance around the world has not improved tremendously. but in the united states it really has. >> a lot of money getting returned to shareholders. before we let you go, john, the gold market, you've also been a student of that. we watched paulson's gold fund down a lot more than actually the miners or underlying metal. but gold seems to be diverging in ways than it has in a while. why? >> it had been trading more like another financial asset. now, with the dollar strengthening, more confidence, that's where the liquidity is helping. people positioned them sems for qe-3. when it didn't follow through people started selling and putting money in other financial assets. now gold is down here at 1570, 1580. i like gold. i don't like gold stocks,
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though. the reason is, corporate governance has not yet been met in the gold stock -- gold miner market. what's happening is i think investors are realizing now that poor capital allocation and basically lying about costs and with a lower gold price is producing a very bad multiple. so multiples have been compressing for gold stocks. without a change, a sea change in governance, you know, we're not going to see a huge rebound, other than if gold rises, it will rise. what we need to see is activism. what paulson should have done, he should have been an activist in gold stocks. but if you don't understand the thing you're dealing with, and if you're a believer in a huge immediate gold price, then i guess you can ignore those things. >> john, we've got to leave it there. as always, appreciate your time. >> okay. thanks. >> carl, back to you. when we come back, rick santelli will break down the jobs numbers as only he can. don't go away. ♪
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welcome back to "squawk on the street." and the santelli exchange. we had a jobs number and it was a pretty darn good jobs number. and it's always about jobs, jobs, jobs. 236,000 headline, 246,000 when it comes to private sector.
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unemployment rate at 7.7. that's what splashes on the screen. a couple of issues there. the participation rate did move down. it matched the one we saw in august. and that level represented a 30-year low. but it was still a pretty good report. one fly in the ointment or not, many are talking about 340,000 multiple job holders, that number is an all-time record. and the only reason that would be a bad thing because, listen, having a lot of jobs to pay the bills is the american way. but if that's a precursor of issues and unintended consequence of obama care that we have to pay attention to. let's go to the before and after. here's something i was saying yesterday on the before regarding jobs, play the tape. i think anything over 225,000 will give you the same dynamic we had in adp and i think that would give us a close somewhere around 205 to 208 which is a huge but it would still represent a new high close. >> all right so listen, 225 or
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higher was not my call. my call was at 144 but it made sense. i thought if the number was 225 or higher we'd see some normalization. stocks, will they continue to go up? they have. interest rates would go up to those levels. and right now we are at 204.5, 205. now let's play the after tape. >> it's really simple. bernanke said 6.5% on the unemployment rate. >> i don't care what bernanke said. >> all right. why don't i care what bernanke said? more than anything if you want to understand the way i take this will give you some gateway into that process. i do not like nanny states. what i like is a country that is dynamic. dynamic is where it's at. that's what separates us from europe. that's why my grandparents came from europe. that's why the late used to make
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fun of france. because it's not about a nanny state. steven jobs, henry ford, thomas edison. they didn't work for anybody. they weren't under the thumb. and listen, ben bernanke, i think he means well, but at some point, truly, you have to stop these programs. you have to let things normalize. because on a day like today, when the numbers improve, interest rates need to go higher. they need to be the throttle valve on the economy. you can't micromanage a $16 trillion economy. nobody can. that's the horrible lesson we learned under alan greenspan. back to you. >> rick, great stuff. just great stuff. we'll talk to you soon. rick santelli in chicago. italy's stock market facing some headwinds. there could be a bubble forming in the ferrari market. prices already getting -- this is hard to believe, 10 million for one car. >> really? >> and another big auction this weekend. we're going to look at the possible prices for the newest round of prancing ponies in a moment. [ kitt ] you know what's impressive?
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>> good morning, carl. we spend a lot of time talking about the dow and s&p. but the index that's caught my attention is the ferrari index. this is an index of 25 of the most sought after ferraris over the past three years. this index is up over 70%. the average price for a collector ferrari is $2.6 million. the broader collectible car market is very strong but it's only grown about half as fast. are we in a ferrari bubble? we may find out this weekend more than a half dozen ferraris will go on sale at the amelia island in florida. this a 1952 could fetch $1.4 million. they're also selling a 1965 gtb that could sell for $1.3 million. now gooding and company is selling this bright yellow 1966 ferrari 275 long nosed top, $2 million. now carl the highest price ever paid for a ferrari is $35
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million for a gto last year. but one of the world's top ferrari experts said a billionaire in the u.s. was recently offered $50 million, that's 5-0 for his gto and he turned it down. the owner says, quote, he didn't need the money and he loves his car. in other words the price just wasn't high enough. so looks like ferrari prices still have a lot of room to run. as amazing as that seems. back to you. >> small sample, i guess, robert. but interesting index nonetheless. thanks a lot, robert frank. we'll see new about 30. >> spanish market absolutely flying up almost 3%. >> wow. >> and david we'll see you later on. >> good weekend to you, carl. here's what you missed if you're just joining us. >> welcome to hour three of "squawk on the street." here's what's happening so far. >> as long as the economic data keeps surprising on the upside, they're going to take care of themselves and that's keeping a nice bid under this market. >> stocks were still climbing the so-called wall of worry. they're not anymore. that worry is gone.
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>> up, 236,000. >> told you. >> the unemployment rate, 7.7%. >> bulls win and bears whine. and if you are a bear here this is annoying. >> this is a truly impressive number. joe kernen, when he went ah, now we know why we've been up for so many days. i'm not going to disagree with that. this is one of the worst going to one of the best. i think that's really -- >> something that had fueled the stock's rise in the past had always been the idea of consolidation, given its cut. and i don't see that as a real possibility on the horizon. >> i don't, either. >> i mean -- >> we have january whole sale inventories up 1.2. that's about four times what we were expecting. >> there's a really good headwind behind the private sector. so good numbers. good numbers for business, and it's indicating, really, that
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the market has fundamentally based rather than just based on monetary policy. >> good morning, live here at post 9 at the new york stock exchange let's get a check on the markets on this jobs friday. the dow has not had a week in which it has traded higher all five days since september of 2011. but we might actually do that today. hanging on to some gains, up 25 after the jobs number this morning. s&p has gone negative, now slightly green again and the nasdaq also hanging onto a very sliver of a gain, up about 0.06%. pandora one of the gainers. announcing the current ceo joe kennedy planning to step down once a replacement is found. we'll hear from kennedy in an exclusive on cnbc in a few moments. facebook in the red after just seeing some strong gains yesterday. thanks to those changes, ceo mark zuckerberg announced to its news feed tool. our road map for this morning, the big banks tapping the first
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part of the stress test. most of it flying colors. in fact nearly 30% of today's new one-year highs are financials. but next week's results could be a lot different. we're going to break down everything you need to know. then is martha stewart the biggest problem at martha stewart living? "new york times" columnist jim stewart tells us why the domestic diva's multimillion dollar compensation package is the source of some growing controversy. plus as tech companies struggle to find good engineers one start-up is trying to train people for those open jobs. bringing computer coding to everyone from elementary school kids to baby boomers and getting millions of dollars in funding at the same time. the ceo will join us live right here at post 9. but we will start with the banks. 17 of 18 passed the fed's stress test, meaning they are sufficiently capitalized, under a worst case scenario. the only bank not getting a passing grade was ally financial. our kayla tausche joins us with more on what to expect next week and why there's this divergence between the winners and the
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losers today. >> well, carl, it's really an interesting story. we have seen in the third annual dodd-frank stress test which is a barometer for the capital and the level of depression-like scenario the bank posting an average of 7.7% in this tier 1 common capital compared to the 5% required in dodd frank ally financial's 1.5% dragged down by subprime mortgages. banks also released the results of their internal stress test. the majority showing higher capital levels on their own test i.e. the best test which models several of those depression-like scenarios was more stringent it appeared that this year the fed put a little bit more scrutiny on trading platforms which is why you see the likes of morgan stanley, goldman sachs and jpmorgan performing less well than some of the regional banks. still a general positive that most did clear the fed's bar meaning the way is paved for them to return capital. it's just unclear whether those returns will be anything spectacular. goldman sachs and morgan stanley did clear the bar by the week so investors are pessimistic about the amounts they'll be able to
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return. in fact goldman's leverage ratio which determines that exactability just 3.9% to the fed's minimum of 3%. citigroup yesterday disclosed its request for a $1.2 billion buyback. a likely indication that's been approved especially since it's the only finance ago really of this pack that's in the green today. wells fargo has merely said it asked the fed for more capital than last year and there are buybacks at bank of america and key corp they would likely benefit the shares the most since they're trading below book value. as always, i'm getting excited for the results next thursday. >> as only you can, kayla. we'll see what happens next week. certainly been an interesting week this time around. thanks a lot, kayla tausche in new york. after a week of record highs, now would be a good time to take a look at some technicals to see what they're saying about the rally. dan fitzpatrick is technical analyst at stock market mentor dotcom.
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good morning >> good morning, carl. >> sounds like you're saying charts mean we're going higher. >> yeah. it's not, you know, the s&p -- we just had a new high in the dow. s&p is right back to where it was a couple times over the last several years. it's not unusual to see a few wiggles in the prices at this point. ultimately this is a head and shoulder continuation pattern. i think you've got it on one of the charts there, this is a -- i think this is the minimum. this is the minimum move here, right at 1547, 1550, but the way this is set up, we've really got a lot more upside. just based strictly on the s&p and we're not even talking about the other sectors yet. >> right. >> and what's leading you to this, correct me if i'm wrong, is the lack of any other major sector diverging from that, is that right? >> yeah. that's correct. and, when it looks -- when the future looks so bright you have to wear shades, as the old song goes, i'm dating myself, then
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you start worrying about some kind of top like oh, my gosh, you know, when things look so good they can't get any better, then that's a sign of a top. but we're really not there yet. there's a lot, there are a lot of issues, that economists, that financial guys, and investors have, with the market, and what's going on in the macro economic conditions. but that's just all part of the wall of worry. i mean you can take virtually any chart of any indexes, except some of the metals, and just draw a line from the lower left to the upper right and that's really what the trend is. and when it gets right down to it, sometimes it's really not any more difficult than that. >> yeah. what's going on then with the nas, why is that such a source of worry for some, especially given the tech has not kept says so far this year. wouldn't you expect it to play catch-up? >> yeah, you really would. and i hear that a lot. i hear that from a lot of technicians, just a lot of general market chatter out there about how there's a big red flag because these other indexes keep
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hitting higher highs, the transports, the industrials, financials, of course, and then the s&p. but then you look at the nasdaq, and it still is kind of mired in this congestion. but that's the typical nasdaq 100 cap weighted index. well, apple has had such a disproportionate share of weighting in that. back at apple's top i think it was about 20%. that's a huge, massive weight on the nasdaq 100, if that's the way you're looking at it. but if you even the playing field, and look at the nasdaq equal weighted index, you'll actually find that that has outperformed everything this year, except the transports. and so i think we've got this real stealth strength in the nasdaq that most folks aren't really looking at. and i like that. i really like the way that's setting up. and, by the way, can you imagine how that's going to look once apple does, indeed, find a bottom? >> yeah. good point. x'ing out apple has been a k45 edge on the upside and the
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downside. bottom line, i know you're trying to be responsible about targets, minimum price target on the s&p 1600. you're putting a date on that? >> no. i'm really not. i don't like to do that, because it makes me look like i'm trying to predict something and i'm not trying to carve out a name for myself by predictions. i will just say this, you know, i've talked about gold, the continuation head and shoulder pattern in gold that we saw a couple years ago. that went and outperformed what the measured move was supposed to be, the minimum where is where we are at the s&p, by 40% over the next two years. no way i'm touching that type of projection. let me just say that on any -- i'm just not going to do it. but on an even number basis, 1600 seems like a pretty good magnet to me. >> all right. dan, always good stuff. appreciate it very much. >> thanks, carl. >> dan fitzpatrick from stockmarketmentor.com. straight ahead, the man who says martha stewart's multimillion dollar compensation package is one of that company's biggest
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problems. jim stewart of "the new york times" is up next. plus hear what the pandora ceo had to say about his decision t step down. julia boorstin spoke to him exclusively last night. first rick santelli taking a look at today's jobs number later on. >> absolutely. we're going to discuss how the equities have come off of it, maybe it was priced in, maybe a lot more than that's priced in. we'll talk about interest rates, can they really get a life of their own, and, of course, let's talk about europe, and the fed exit, and an opinion on a lot of things we're going to dig down with him at the bottom of the hour. tion. only hertz gives you a carfirmation. hey, this is challenger. i'll be waiting for you in stall 5. it confirms your reservation and the location your car is in, the moment you land. it's just another way you'll be traveling at the speed of hertz. transit fares! as in the 37 billion transit fares we help collect each year. no? oh, right.
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dow is up 41. take a look at the heat map here. one stock that's helping that today is definitely h&r block. >> carl, hrblock up big this morning on solid volume here. reporting bigger than expected quarterly loss. but also said its cost cuts were made on track. said it expects significant earnings and margin expansion in fiscal 2013. the stock, of course, has been on a tear up some 70% in just the past 12 months. >> all right, thanks, josh. pandora's ceo joseph kennedy announcing he will soon leave the company. kennedy says he will remain ceo until a replacement is found. our julia boorstin sat down with him in an exclusive interview following the announcement last night. >> carl, kennedy told me that after nine years running pandora
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it's time for him to go and recharge his batteries. but he told me he doesn't expect to leave too soon, that it could take months and months to find a new ceo. >> selection of a ceo is a balancing of different skills and experiences. i don't think it has to come from somewhere from the music industry. i certainly didn't come from the music industry. it would be surprising if that person didn't have experience in the world of consumers, this is so deeply a consumer business. >> analysts say kennedy does leave big shoes to fill but jpmorgan says the company is extremely well positioned, and kennedy says he's confident mobile will continue to drive pandora's growth. >> we can make a good business with rates at or near where they are. because our excellence in motivation is so strong and continues to grow. and that's the cornerstone of making the business model work. >> now, we'll be watching to see
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how the company handles possible competition from apple and youtube streaming music services. they're both expected to launch sometime this year and of course, carl, we'll have to see who the board selects. back over to you. >> that is another parlor game going on around the street today for sure. thanks, julia. julia boosten in los angeles. jcpenney announcing it will cut an additional 2200 jobs. the trim costs due to plunging sales and more potential bad news for penney sales, they've agreed not to sell any martha stewart designed home goods until april 8th. the judge overseeing the lawsuit has sent the parties to mediation with an april 8th deadline to reach an agreement. "new york times" columnist jim stewart has been following the lawsuit and joins us this morning. good morning. >> good to see you. >> you've written out about martha extensively in tangled webs. who is in the right in general on this case? >> well, you know, people may be surprised to hear this but i came away from this trial feeling some sympathy for martha stewart.
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yes, her well known is on ample display. but for me the real story is jcpenney and its chief executive ron johnson. after all they're the ones that initiated this ridiculous deal which was a pretty obvious breach of a contract with macy's. they went to martha stewart, when her company was in trouble, he dangled the pbili hundreds of millions of dollars in front of her. this is like putting catnip in front of a cat and saying he would never want to breach her contract there are all these embarrassing e-mails where he's exhorting people to get her to do exactly that. really devastating testimony, i think. >> and of course, martha, i guess, if we're going to put some drama into this, was already vulnerable given that she said macy's wasn't taking her brand to the next level. >> well, that's true. and you know, i don't know the merits of that. she's rethinking that. there was a phone call yesterday. terry lundgren's testimony, who is the ceo of macy's, was completely fascinating. i've never read an account where
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i've seen a ceo so angry as he was when maryland called and said i'm doing this deal with jcpenney. and he said he'd never speak to her again. but yesterday, they got on the phone together, at least an indication there may be some settlement of this. which, by the way, if you want to look at the mistakes ron johnson made here. number one, doing this deal in the first place. number two, writing, you know, sophomoric e-mails sticking it to terry lundgren, which turned him into a full-time enemy. and then three, not resolving this thing and letting it go to trial with hundreds of millions of dollars of legal fees and all this embarrassing information. so in my view people want to know why jcpenney is in trouble need look no further than his management skills in this case. >> i wonder if you think that is hubris that is born in a culture at apple, i guess, where he thought you couldn't lose at all? >> i think there may be some of that. and some of the retail analysts i've talked to said look, this guy's never been a ceo before and this shows inexperience. and i think another important point is, in the testimony you see bill ackman playing a big
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role in this. he leaves the hedge fund. it's the biggest shareholder of jcpenney. many people believe he's the puppeteer who pulls the strings of ron johnson, and there's e-mails in there indicating that this still wouldn't have happened if bill ackman hadn't pushed it. >> all right. tell me where -- how martha's comp plays into all of this. >> how her compensation? >> yes. >> well, there was like a side deal in this thing where royalty payments and money was going to go directly to martha stewart. not to martha stewart living. it's a terrible example of self-dealing by a ceo in my opinion. although, as i said, this is not new. the idea that martha stewart wants to line her pocket, i don't think any of us can be all that shocked at this point. on the other hand, if you're a shareholder of this company, i would think you would have to think twice about someone who puts their own interests so much ahead of the company. >> right. finally, you know, there's been so much discussion abouts extension of her grants through retailers time and time again, we had koppelman here the other day who said that the kmart
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divorce wasn't nasty but i remember her being very upset when that deal ended, too. can she ever have an amicable separation from someone who once distributed her products? >> well, we haven't seen any evidence of that. just as a consumer i went into both macy's and jcpenney yesterday and looked around, and i think the martha stewart stuff looks pretty good. i think they're pretty high-quality products. it's a shame, really, that all this other circus-like atmosphere has prevented it from being developed to the point it could. i know she often compares herself to ralph lauren who is a master at this. maybe she's her own worst enemy. it's a shame that it hasn't done better. >> yep. certainly the market cap between lauren and martha stewart would back you up on that. >> it speaks volumes. >> an incredible story. look forward to seeing you again soon. >> thank you. >> jim stewart over at the new york stock exchange. straight ahead find out how catholics, lent and fish mcbites are helping drive mcdonald's sales numbers. not a bad february given all the
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mcdonald's is leading the dow today after better than expected same-store sales for february. here to break it down, a senior research analyst over at piper jaffray. nicole, always good to have you. >> thanks, carl. >> a lot of discussion about all the headwinds they were facing. one of the toughest comps of the year. clearly some weather in the states. health issues, concerns in china. they managed to come in okay. >> yeah, a little bit of a relief rally here.
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sentiment versus sentimentals i think investors are basically glad it wasn't worse than it was. >> is there any sign that this is due to menu? that the pipeline is a little bit fresher than people gave it credit for? >> i think in part that's fair. it's really hard to say it's anyone's thing. domestically they're facing a loot of competition from their peers, having better looking stores, matching their hours, trying to match their service. so the one thing that they have to be in the forefront of, and they are, is mainly innovation. >> and i remember we had a discussion a few weeks ago where, i mean it seemed like the other players, particularly the burger kings of the world, were starting to rip a page out of their playbook, innovate a little bit faster, and the whole issue of share gain was really coming into question. does this put that to bed, do you think? >> not at all. in fact, you know, i think it's easy, and for mcdonald's to talk about the macro environment kind of like you outlined. but the fact of the matter is there's also a competitive force and i think burger king is at
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the front of that. in terms of menu, they'll -- they will work to innovate just like mcdonald's. >> let's talk about your price target. 103. looks pretty good. i mean this certainly not as good as it was, the stock was at 85. but how positive are you on it versus potential gains among its competitors? >> i would say we still see a healthy level of upside. probably due, frankly, see more upside and some of the other qsr players, specifically burger king, and the other thing i would mention is this is no longer the only place investors have to hide out from a defensive nature. a lot of other stocks are also increasing dividends, or really executing share repurchase to grow earnings. >> finally, there's always the macro issue, nicole, unemployment leads a lot of people to stop by a mcdonald's, for instance, on their way to
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work. breakfast is a nice margin business. if we start to see real, nice, sustained gains in nonfarm payrolls do you think differently? >> absolutely. in fact, i think that would help all qsr players. it would help qsr first, and the fastest, and that's right, breakfast is habitual. the great margin, and that's the place that the consumers would go back to the quickest. >> last question. we've been joking on the set about the grilled onion burger, the fish mcbites. are those material to the month? >> again, no one thing is material. but i think that commercial is phenomenal on the mcbites. i had it the other day in the airport. it's a decent product. and again, i mean, they do lead the way in terms of innovation. >> that's getting it to taste good and be easily replicated not as easy as some people might think. nicole, thanks for your time. bell's about to sound across europe here. we'll get the close, talk about the spanish yields, and the impact on our session here.
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we spent most of the morning talking about a jobs number here. the spanish ten year and some of the periphery the big story in europe. >> europe is able to really follow through on the coattails of hat is happening here in the united states. certainly, on the moves, the result of the fed action when arguably the boe wasn't able to come through with more pro-active policies. it's a higher close in europe.
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particularly a higher close on risk assets in italy and spain. >> the european markets are closing now. >> it is green across as you can see but you do see spain down there on the bottom left-hand corner having an excellent day today, the bond market and the equities are rallying there. in general terms, of course, the news that we've had in the united states, and indeed the news that we've had in china overnight with that very strong export figure has meant european equities are able to rise high and the german market today, which you'll be aware, is one of the best performers, because you have the real quality blue chip. actually cost $8,000 earlier in the session. settled back down now but it hasn't been at 8,000 since january 2008. i mentioned peripheral bond markets are also rallying. so you had the yields diving because they move in the other direction on both italy, and both spain and notably portugal. yesterday the s&p actually put it to a stable outlook.
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so big moves there, as you can see. meanwhile, you get that -- the junction, if you like, of what's happening in europe, and what's happening here in the united states, with euro/dollar. and there you see i very dramatic move higher in the greenback. and as a result, you see the euro falling down. look at that move down that we've had so far today. it's a big figure move, up 117 thaz you can see. i think a bigger issue moving forward might well be where we are in the uk. crazy as it may seem overnight the man who's going to take over the euro group, the dutch finance minister, lectured his students in amsterdam where he suggested the big move down on sterling we could have sterling prices moving forward such as the poor state of the uk's public finances. extraordinary, carl, that he would make that statement. but there's a lot of discussion about the uk, and whether, of course, the bank of england is getting even more qe. we were disappointed on that front yesterday but it's still
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in the offing. >> there's a lot of push and bull. on the committee. that's for sure. >> have a good weekend. >> you, too. >> get a check on energy, too. bertha coombs at the nymex today. >> i'm in the gold pit here. and gold today, very interesting. it's basically saying that either side of unchanged and at times slightly positive. analysts over at kipco say in the face of that jobs number that would be bearish for gold, and anyone looking for a safe haven on a day like today, and the strong dollar, the fact that it's hanging in there is actually fairly positive. we'll have to watch as it goes towards the close. gold has been under pressure because a lot of investors have been selling. a lot of their etf holdings and the etf holdings have actually had to sell some of their holdings in gold. goldman sachs, meantime today, says overall they think commodities could be due for a bounce over the next three months, up maybe 3%. they think copper has been overdone. the downside today, though, it's really not playing in this
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rally. we have a mixed situation when it comes to the energy patch today, as well. wti moment, like gold hanging in there, just a little bit to the downside. we're seeing selling pressure on brent with that pipeline having come back online full bore. >> that goldman call something everyone should take a look at today. getting a lot of chatter. bob pisani is here at post 9 watching. >> you know, i think the important thing is, the number on nonfarm payrolls was great. there were whisper numbers that were above 200,000 on the personal growth numbers. so maybe the reaction was a little bit muted because there were high expectations. but take a look at the sectors and all this week we've seen industrials, we've seen materials. all moving to the upside. again today, you see the same thing, materials, discretionary technology on the upside. just take a look at the bank, some people have been asking me why are the banks not doing better because the stress tests were good, right?
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citigroup was particularly good. everyone was very happy about that. goldman and morgan stanley a little bit of disappointment. there was a little bit better. morgan, bank of america, regions financial, suntrust, some of the other ones did well. i think part of the problem is there is an expectation they were going to do well and they basically bought into that all week. take a look at the xlf and this is the main etf associated with financial stocks and look what's been going on here. we're at a four-year high. there's been a anticipation for awhile. these stocks have been moving up on this. i think today while the results weren't disappointing for almost all of them, maybe goldman and morgan is the exception, i think that it's a bit of sell on the news here. one thing i do want to point out to you, and remember we've been waiting for this great rotation out of stocks into bonds, it isn't happening yet. however, big bond funds, etfs, are down six days in a row. this is a one-month vanguard long-term bonds one of these etfs that buys the long-term treasuries. blb is the symbol. six days in a row now. that starts to get aly bit
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noticeable. i don't see huge redemptions taking money out but price is declining here so going to get people's attention if that trend continues. speaking of trends, let's talk about trends in mutual funds, and in the etfs. this is the weekly numbers. we are continuing to get inflows. these are stock mutual funds. and i'm splitting up between mutual funds and etfs. 3.17 billion. fairly healthy. bond funds, still money coming in. 3.5 billion. no sign of an outflow from bonds. take a look at exchange traded funds. i break it down two different ways but sometimes we get it differently. inflows into stocks, etfs, inflows into bond etfs. everybody's winning at this point. that's my point. no clear sign of money flowing out of the bond funds yesterday. 85 billion into equities funds all throughout the year. that's very, very positive overall. here's the global indices. carl look at this, everybody is up except china. germany is at a five-year high. japan is at a multi-year high,
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as well. that's a four-year high for japan. the yen just plummeting. plummeting this week, down again today, very big. as our number kind of pushed the euro down, down, as well. >> yeah. we'll see if dow makes it five in a row. hasn't done that in awhile. >> slowly getting close to that historic high on the s&p 500. >> thanks, bob. let's get to rick santelli in chicago. a little more discussion of the jobs number today, rick. >> oh, absolutely. we're going to be talking about it all day and probably into next week. andrew brenner, welcome. how's it going, national alliance securities. >> rick, i'm doing great. how are you doing today? >> not bad. you know, there was two words in your write-up after the number that really struck a chord with me because it's the common conversation on the floor. viewers, listeners on radio, job splitting. andy, tell us what job splitting is. i know it's 340,000 and tell me your thoughts about it. >> well, here i'm going to start with today's number. today's number the headlines were just awesome. i mean this number is a great risk on number.
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you had payrolls up, nonfarm payrolls up 44% above the expectations to the rate down 0.2 but the good thing about the number is the continued skepticism as to what breaks up the number. and one of the things that people are talking about is the fact that obama care is causing people to split jobs. in other words, they'll hire people for 20 hours, they may show up twice and someone's in the payroll report. so we're looking into that. we don't have any real hard data on that right now. but if job splitting is one of the unintended consequences of obama care that could really juice up this number. the good point is that the skepticism keeps the fed on hold and keeps risk assets bid well. >> all right. now when you say skepticism keeps the fed on hold, obviously you're speaking with your trader hat on, kind of more as a nontrader type i personally like to see the fed clear the zone but regardless, how do you think all of this will or will not
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impact europe? can we actually, you know, give them a helping hand by growing our economy, and maybe exporting a little bit of that dine civil? >> well, we can certainly do some of that as well as i think china's going to do more of that than the u.s. but i think the u.s. economy is going to be much stronger, and i think the fed's going to be really between a rock and a hard place, as to when to start raising rates, or start lessening qe. i mean, bernanke clearly said last week he has no intention of doing it. then again he's out in ten months. so i think the markets will look at that. i think ten years we'll be under pressure. 206, 07, we see negative numbers coming in at 215. so i mean we think the treasuries are going to be under pressure and we think the stocks will continue to melt up. as far as it affects europe, as your previous commentator said, everything is doing well in europe, you know, today, italian bonds are good. spanish bonds are good. portuguese bonds are good.
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greek bonds are good. all the equity markets are okay. you know, europe's got a lot of problems. but they're not at the forefront right now. they're on the back burner. so i think the u.s. is far and away on the front burner. >> all right i'm going to give you one last question. we're almost out of time. in a couple of months, when we look at first quarter gdp and i'm putting you under the gun here, what do you think, what neighborhood do you think that first quarter number will be? >> you know, that's a hard one. because the sequester's going to have some effect on that. i can't quite determine but i think the real economy is growing 2.5% to 3% and i think you'll see that throughout the year. this is going to be a much better year than what people are anticipating. >> andrew, it's always a pleasure. like your forthrightness. thank you for being a guest. >> all right, when we come back why a labor shortage in the housing market could mean much higher home prices. and later what do the facebook ceo, a professional basketball player and a rock
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does today's jobs report mean for the rally? too hot for just right? a former ceo of a major retailer tells us how jcpenney can turn things around. but stress tests are in. but you may not want to bet on a wave of dividend increases just yet. >> scott, thanks. the jobless rate is at its lowest level in four years but the labor shortage in home construction is not improving. many construction workers left the business during the crisis and few are coming back. that could mean higher prices. diana olick has more on that. what a story. >> it is, carl. i mean construction jobs surged in february to the highest level in six years. but those numbers should be even higher, given what's happening with housing starts today. still, there is a lack of workers, because during the housing crash they all left in droves, and as you said, many of them are not coming back. the biggest growth in february construction jobs came in residential specialty trade contractors, up 17,000.
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that's your plumbers, painters and electricians. jobs boosted by big jumps in home remodeling, as well. still it is not enough. housing starts were up 24% from a year ago, but construction employment in residential is up barely 3%. that's according to the u.s. commerce and labor departments. now former construction workers headed to better paying jobs, such as trucking, energy, and even highway construction out in texas. now we were out in las vegas earlier this week where housing starts for some builders are up over 100%. they are desperate to find skilled workers. they're having to pay them more and raise home prices. but they're just not seeing them come back as fast as they need. >> the labor has other options. other markets are very strong. like texas and phoenix. over the last year or two, we lost quite a bit of labor to the oil fields, and to places like wyoming and north dakota where you wouldn't expect it to go. >> now as a result it is now taking 15% longer nationwide
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from start to finish to finish a house. out west, where the shortage is really bad, it's taking 23% longer, and that's not good for the builders. it costs them more, and again, it is raising the prices of new homes. lots more on the blog realtycheck.cnbc.com. >> if it's not material, it's labor. thanks so much, diana. want to send it over to josh to get a quick market flash. >> foot locker is in the red this morning. analysts covering the stock tell me expectations have been raised for how well the quarter to date comps were going to be. folks looking for mid singles sure enough, foot locker said low singles. also, the quarter was decent, analysts say but not great. expectations were certainly better than reported. foot locker down some 6% right now. carl, back to you. >> all right, thanks josh. computer coding is not just for nerds anymore. online start-up code cademy is teaching everyone from
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tac toe. >> i first learned how to make a green circle and a red square appear on the screen. >> you just try to make something, trying to transfer something from your mind to the computer to a tablet, it's a -- it's an experience. >> the whole limit of the system is just that there aren't enough people who are trained and have these skills today. >> silicon valley standouts like mark zuckerberg, bill gates supporting code.org. a movement to encourage people to learn how to program. programming literacy is becoming more important for candidates in the job market. code cademy offers free coding classes in programming languages ranging from python to jawva script. jack simms is the ceo and founder and joins us with the breakthrough. >> thanks for having me. >> this is like a revolution. >> we think so. >> it seems to be happening on multiple platforms. walk me through what code cademy is? >> it's a community of people
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creating lessons on programming and taking lessons from other people all over the world. so we have millions and millions of people that are learning jawva script, html, css, building things online and learning them from other people. >> how does that work? how can that work? >> right now we're really focused on reaching as many people as possible and building a product people are going to use. >> this person could be -- needs to be how old, and needs to have what kind of prior education? >> in theory pretty much anyone can learn to program without very much prior education. we try to make it really simple to get started. >> right. i mean, kindergartner, a preschooler? how young can you be? >> i'd say middle school is probably the right age to get started. >> obviously there's, i'm sure, some consternation about early childhood education in this country, there's a lot of room for improvement there. do we as a population have the basis to learn how to do this thing well? >> definitely. i think what we want in the 21st century is for programming to become just as important as reading and writing.
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for people to be able to think in algorithms the same way they learn how to read, they learn how to write, they should learn how to code. >> right. how did you get your start in all of this? >> so i actually didn't know how to code going into college, taught myself a little bit here and there. and we built codecodmy to help me program myself. >> and your aspiration was to do what? >> i was to build something that i could learn from. turns out there's a lot of people like me that are just learning. >> the -- you got -- we saw the involvement from bill gates and zuckerberg. is that the model? are you trying to teach people to become entrepreneurs and eventually philanthropists and titans of business? >> definitely that would be great. but more importantly it's using programming in your everyday life. every single job now requires a little bit of computer knowledge. if you're a journalist and pulling statistics to look at stories you need to have a program. pretty much every job now requires a little bit of programming knowledge. >> i do know people who grew up when computers were really just
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giant mainframes, and they learned cobol and now they're hopelessly out of date, convinced they'll never learn any of the new languages. how worrisome is the fact that javascript be replaced by something else? >> you know cobol it's not so difficult to pick up javascript. the average computer programmer knows a lot of languages. language being in flux is not -- >> let's say we have a parent or someone listening or watching today interested in getting their kid or maybe even themselves involved what do they do? >> go to codecademy.com and you can start typing on the page. >> are there metrics, milestones by which you graduate or say i have achieved a certain level, sort of empirical posts? >> yes, you work on projects as you go through. say build websites, create games, and you never really graduate because there's always something new to learn. >> we talk so much about how apps, for instance, have become sort of the bed of small
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business around the world. all those people have to know how to code. >> exactly. we've seen whole businesses created by people that learned programs at code cademy, selling apps from the app store and make a living. >> can i ask how old you are? >> i'm 22. >> you got an early start. >> yeah. >> there's a lot more to come, i'm sure. >> hopefully. >> zack sims. up next the moment you've all been waiting for. >> the jobs report is out. >> up, 236,000. >> oh, yes. >> were you able to nail the number? if so you will be the winner of this special post 9 mug. signed by the entire "squawk on the street" gang. find out if you're the lucky winner next on "squawk on the street." zap technology.
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♪ [ indistinct shouting ] [ male announcer ] time and sales data. split-second stats. [ indistinct shouting ] ♪ it's so close to the options floor... [ indistinct shouting, bell dinging ] ...you'll bust your brain box. ♪ all on thinkorswim from td ameritrade. ♪ but at xerox we've embraced a new role. working behind the scenes to provide companies with services... like helping hr departments manage benefits and pensions for over 11 million employees. reducing document costs by up to 30%... and processing $421 billion dollars in accounts payables each year. helping thousands of companies simplify how work gets done. how's that for an encore? with xerox, you're ready for real business.
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all your important legal matters in just minutes. protect your family... and launch your dreams. at legalzoom.com we put the law on your side. welcome back to "squawk on the street." i'm josh lipton. tempur-pedic well in the green this morning on heavy volume. the mattress maker now saying it received clearance from the ftc for its acquisition of sealy. tempur-pedic up some 44% this year. carl back to you. >> that sector has been crazy in the past year or so. thanks so much, josh. want to take a quick look at
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shares of facebook here. the stock under some pressure today after the social network announced those changes to its new speed feature yesterday. >> there's no other social service like this at scale. there are a lot of other great social apps that enable you to share one kind of content or with one audience. and i think these apps are great. but i really think that there's a special place in the world for this personalized newspaper that can really span the whole gamut, and make it so you can see all of these types of content in one place. >> mark zuckerberg speaking at menlo park yesterday. the shares did finish higher yesterday. they closed on the lows but investors not as impressed, it seems, with some new features today although we're in a slightly weaker tape than we were 24 hours ago. we do have a nail the number winner with a winning guess of 241,000. our winner was within 5,000 of february's nonfarm payroll number. quentin schmidt is our winner from lake stevens, washington

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